Saturday, August 10, 2013

China’s Central Bank Official Calls For New Monetary System | InvestmentWatch

Offers Next Step In Removing Dollar From Reserve Currency Status


It was just one day ago that we wrote the following: “The fact is that the US is currently exporting their (monetary) inflation. Lots of the newly created dollars end up at foreign central banks making abroad currencies weaker. But … the dollar is increasingly disliked and bypassed in trading agreement of the BRICS as we reported herehere, and here.”

Almost at the same moment of writing, an article appeared from Yao Yudong, one of the officials of the People’s Bank of China’s monetary policy committee, in which “he calls for a new Bretton Woods system to strengthen the management of global liquidity”. According to Zerohedge, “Yao called for more power to the IMF as international copperation and supervision are needed. [...] Contrary to prevailing misconceptions that the SDR may be the currency of the future, China just may opt to have its own hard asset backed optionality for the future.”

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Comment: Remember the golden rule? That's the one that goes: "He who has the gold makes the rules!" The US used to follow that rule till Nixon came along and abolished it so he could afford to send American kids to the rice paddy's of far away Vietnam to die for "his" country and still pay for LBJ's pacification strategy a.k.a. "vote buying" scams. So for as far as America was concerned, fom that time onward, you could have both guns and butter. The result was that the old tried and true "Golden Rule" got superseded by the new "American Hegemonic Rule" That rule states: "Whoever holds the gun makes the rules!" 

Ironically, setting America up as the world hegemon would lead to it's eventual undoing. We are seeing America enter it's death throws as a world power. Even more ironic is the way it all went down. It would appear that China and America have switched places. Surprisingly, it is China that is calling for a return to the gold standard. This of course would mean a return to global fiscal sanity. It would also mean the end of the dollar as the world's reserve currency. 

On the other hand, the Obama-Nation of Desolation administration as spoken of by the "profit" Daniel seems to like to quote from Mao's little red book. In particular they seem to love the quote about political power coming from the barrel of a gun! It's because they still have the gun that America will not likely go out like the Brit's did, with a whimper. This changing of the guard will likely result in a global thermonuclear war! If you remember, that's the "game" in which the only winning move is, not to play!

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